Visit great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

India in world business rankings

Doing business in India

India is one of the fastest growing economies in the world. The UK exported goods worth £6.35 billion to India and services valued at £2.24 billion in 2014, and the UK is the third largest investor in India.

It’s a very large country made up of 29 different states and 7 union territories. The market varies widely across its many different regions and states.

India is a market which requires a lot of patience and a long-term strategy to be successful.

Benefits for UK businesses exporting to India

There are several reasons to choose India as an export destination:

English is widely spoken

a common legal and administrative history

rising personal incomes creating a new middle class consumer market

fast-growing economy with one of the world’s largest youth populations

expanding emerging cities with more than 50 cities now over a million people

Challenges and risks of doing business in India

India is a price-competitive market and price is an important consideration for consumers. You will be expected to negotiate on the price for your goods and to discount.

You must check what the import duty is for your product in India to see if your export is viable. It’s likely to be a minimum of 35% once all additional taxes are included.

Researching the Indian market

India is not a single national market. In India each state resembles a separate country, often with its own language, cultural practices and preferences. Different regions have different industry clusters. Therefore regional plans and good local research are needed.

You need to research market entry requirements in specific states using both desk research and market visits.

Setting up a corporate or non-corporate entity in India

A liaison or branch office in India needs permission from the Reserve Bank of India under provisions of Foreign Exchange Management Act (FEMA) 1999.

A project office is treated as an extension of the UK company. It doesn’t need permission from the Reserve Bank of India, but is subject to some reporting requirements. It’s taxed at the rate applicable to foreign companies.

A UK company can set up a wholly owned subsidiary company in India in the form of a private company subject to Foreign Direct Investment (FDI) guidelines.

There are no separate laws for joint ventures between UK and Indian companies. Laws governing domestic companies apply.

Establishing a franchise in India

Merger or acquisition in India

Merging with or taking over an Indian company with local expertise including an established customer and supplier base will help you succeed in the Indian market. However, good ‘due diligence’ on your prospective target is essential.

Direct export to India

UK companies can consider direct export to India by contacting appropriate end users. You might consider this as a first step before appointing a partner in India.

Online selling to India

To sell online in India you need to localise your website or use an online marketplace.

You can start exporting in a few steps online. The DIT can help you find the online marketplace best suited to your product or service in India and access preferential deals negotiated by government.

Getting finance to fulfil an export contract to India

Schemes are available to UK companies selling products and services to India to make it easier to fulfil an export contract and grow your business. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to India. Contact one of UKEF’s export finance advisers for free and impartial advice on your finance options.

Getting paid in India

You need to use secure terms of payment in India through a letter of credit or documentary collection via your bank. The other option is payment or partial payment in advance. Open account is not allowed in India.

Your contract should always clearly state the terms for delivery and payment of goods and services. Indian law does not regulate late payments, and settlement action through the courts can be expensive and take a long time.

Currency risks in India

If you have not fixed your exchange rate you have not fixed your price.

You should consider whether the best option for you is to agree terms in sterling, US Dollars or Indian Rupees in any contract. You should also consider getting expert financial advice on exchange rates (sometimes called FX).

Transferring money from India

There are exchange controls in India. Foreign currency money transfers from India are subject to restrictions under the FEMA.

Legal considerations of doing business in India

The legal system in India is based on English common law and the judiciary is relatively independent. However, court delays can run to many years making litigation very expensive and lengthy.

Contact the DIT team in India to help find tax and legal advisers before entering into agreements.

Controlled goods export licences for India

You must have a licence to supply anything on the UK strategic export control lists to India.

Nuclear technology licence applications are considered against the Nuclear Suppliers Group (NSG) trigger list and NSG dual-use list for nuclear transfers to India. This will be done on a case-by-case basis for all items destined for International Atomic Energy Agency (IAEA) safeguarded civil nuclear facilities in India.

Import restrictions in India

Standards and technical regulations in India

Imports of some products are subject to compliance with specified Indian quality standards. Manufacturers must obtain certification from the Bureau of Indian Standards (BIS) before exporting such goods to India. BIS does offer pre-certification subject to production inspections.

Around 109 products are subject to compliance with these standards, including:

The Food Safety and Standards Authority of India maintains a Food Import Clearance System which can be accessed to understand the requirements for export of food to India.

Labelling requirements in India

All imported pre-packaged commodities intended for direct retail sale must include specific information on the label.

Declarations may be printed in English or Hindi. All imported goods as well as transport documents must show standard units of measurement and weight.

You must comply with these requirements for your consignment to be cleared by customs in India.

Slightly different arrangements apply to pre-packaged commodities such as raw materials or components that need further processing before they are sold to consumers.

Intellectual property (IP) in India

You must register your intellectual property in India to guard against potential infringement. Registration of patents and trademarks can take months and sometimes years, so you should plan well ahead.

If faced with infringement or piracy you should engage a local legal practitioner who understands the context and has experience of initiating appropriate civil or criminal proceedings.

Documentation in India

Shipping your goods to India

If you are not knowledgeable about international shipping procedures you can use a freight forwarder to move your goods. A forwarder will have extensive knowledge of documentation requirements, regulations, transportation costs and banking practices in India.

India has opportunities in all sectors as it expands and develops. It is a price-sensitive market, but there’s a natural fit between the UK and Indian economies. UK companies offer goods, technology, services and expertise in the areas that India has identified as critical for rapid economic development including:

finance

infrastructure

energy efficiency

vocational skills and education

healthcare

Language and culture in India

India is hierarchical, even in the office situation. In meetings, small talk, particularly about the family, is highly valued as you build a relationship.

Important rules of behaviour include:

using your right hand in all situations

always having a business card to present

Business and official contacts are addressed as Mr/Mrs/Ms or Sri/Smt (Srimati) with surname. Refer to business superiors and those senior in age as ‘sir’ or ‘madam’. Do not use first names unless invited to do so.